Riverstone’s Next Chapter

As part of my Harvard Business School Course, one seminar was focused on Riverstone, a joint venture based in China between Pipestone Holdings (experts in swine health and biosecurity in the US) and Proterra Investment Partners. In Shandong province, they built three world-class farms, with capacity for 20,000 sows and 520,000 weaned pigs each year.

Pipestone, a US based company, offer swine management services to farmers. Their work in China began in the early 2000s, when they were invited to speak to pork farmers, taking on consulting jobs and some farm management contracts with Chinese producers. Proterra, a private equity firm focuses on investing across the agribusiness industry, and is one of few sizeable, pan-regional PE firms focused on food and agriculture. The opportunity for this joint venture in China arose in the early 2010s. The Chinese government aimed to modernise and integrate pork production, including a target of 65% of pork to come from industrial operations.

The venture also encompassed Riverstone Management, building on the work undertaken by Pipestone in China, offering advice on building design, farm management, veterinary consulting and team training. A local team was employed by Riverstone to utilise their technical knowledges to understand the Chinese farming industry. I found it interesting to note that projects need to account for the nuances of the local market and adjust plans and processes accordingly.

The devastating ASF outbreak in late 2018 and early 2019 in China hit Riverstone, with one of their contract finishing sites losing 2,500 pigs within 90 days. Despite suffering loss, Riverstone, as a large, expert organisation, were able to use their knowledge to rethink biosecurity protocols, farm designs and other processes, to prepare and prevent the outbreak as much as possible. The swift action meant Riverstone’s work was able to continue, and they are now in a position to think about building a fourth farming site. In addition, Proterra have recouped much of their initial investment, and Pipestone have begun early-stage consultation projects in farms in Mexico, Russia and Brazil.

As this case-study demonstrates, collaboration offers new opportunities, as Pipestone were able to work more sustainably in China as part of the Riverstone joint venture. In the current agriculture market, as we seek to make our food production more sustainable and secure, joint ventures offer a key opportunity to collaborate, pool expertise and resources to undertake projects with bigger goals, in larger markets.